A newly released report by Los Angeles Economic Development Corporation (LAEDC) found that Airbnb guests and hosts in Los Angeles are generating hundreds of millions of dollars in economic activity. The report also concluded that new regulations to limit short-term rentals would cost the city and county thousands of jobs and millions in revenue.
“Hospitality and tourism are important to the Los Angeles economy, and our analysis found that Airbnb has a marked positive local economic impact on those industries and the economy,” said Somjita Mitra of the LAEDC. “Our research found that Airbnb generates $900 million in economic activity, supports more than 7,400 jobs and is expected to generate $40 million in transient occupancy taxes on an annual basis, while also providing alternative accommodation options for tourists who visit the region.”
Airbnb’s impact in LA
The analysis comes as the City of Los Angeles continues conversations about how to regulate the short-term rental market in Los Angeles. The report found that regulations limiting short-term rentals to primary residences and capping the number of nights a host can rent their space to either 60 or 180 days would significantly reduce the economic benefits to the city and county.
LAEDC estimates that a cap of 60 days and a primary residence-only restriction would cut economic output generated by annual visitor bookings through Airbnb by 60%, down to $375.5 million. Under a 180-day cap and primary residence restriction, economic output would drop to $692.2 million–a 25% cut from the $905.5 million generated under the status quo. Furthermore, the restrictions lowered the number of jobs supported by Airbnb activities to 3,070 jobs (60 days) and 5,660 jobs (180 days), compared with 7,440 jobs with no restrictions.
The report also addresses concerns about Airbnb’s impact on the hotel industry, which continues to experience record growth despite the growing popularity of short-term rentals. When accounting for impact on the hotel industry, Airbnb hosts and guests generate a net $600 million in economic activity, according to LAEDC. This demonstrates that both hotels and short-term rental operators are helping accommodate the growing number of visitors to Los Angeles.
Home sharing plays an important role in the lives of thousands of Angelenos and the city’s economic prosperity. That is why we are committed to working with elected officials to pass commonsense laws that promote home sharing while targeting bad actors who impact the city’s housing stock.